Gold yesterday increased by 0.06% to settle at 60234 as Treasury yields and the U.S. currency declined. Days before the largest economy in the world is scheduled to begin defaulting on its debt, improved risk sentiment impacted bullion as the plan to raise the debt limit and curb government spending in the U.S. was passed by a large margin. After Fed Governor and Vice Chair nominee Philip Jefferson and Philadelphia Federal Reserve President Patrick Harker indicated their willingness to forgo hiking rates next month in order to evaluate new data, the drop in gold prices was restrained.
According to Swiss customs data, shipments to Turkey, India, and China decreased in April, causing Swiss gold exports to drop to their lowest level in ten months. The reduction occurred during a time when bullion prices were quite high, which often dampens consumer demand, especially in Asia. After a terrible earthquake in February, Turkey also placed some limits on the import of gold.
According to the customs data, shipments of Swiss gold to India and China’s mainland were at their lowest levels since January, shipments to Turkey were at their lowest level since April of last year, and shipments to Hong Kong were at their lowest level since November.
Technically, the market is under short covering as evidenced by the market’s drop in open interest of -2.68% to settle at 15028 while prices are up 36 rupees. Currently, Gold is receiving support at 59821 and a move below that level could result in a test of 59407 levels. Meanwhile, resistance is now likely to be seen at 60513, a move above which could result in prices testing 60791.
